Endocytosis is important for the uptake of proteins and nutrients at the cell surface and down regulation of many signaling receptors. While many factors involved in endocytosis have been identified and a large number of protein-protein or protein-lipid interactions for them have been described, how the timing and regulation of the assembly and disassembly of these components coordinates this dynamic process is not well understood. Dephosphorylation and subsequent phosphorylation is a major mechanism via which assembly and disassembly of endocytic factors is regulated. Studies in this lab have taken advantage of the powerful molecular genetic methods of S. cerevisiae to study phosphoregulation of endocytosis. Many yeast endocytic factors are homologues of those found in animal cells, indicating that yeast can serve as an important model for studying endocytosis. We discovered an essential gene SCD5 as a Suppressor of Clathrin Deficiency. We hypothesize that the binding of Scd5 to type 1 protein phosphatase is part of a phospho-regulatory cycle, wherein it may reactivate several early endocytic factors for new rounds of vesicle internalization. This is analogous to the dephosphorylation of endocytic factors by calcineurin to activate clathrin mediated synaptic vesicle recycling during nerve transmission. ScdSp also localizes to the nucleus which suggests that Scd5p is multifunctional and has additional unknown cellular functions. These findings lead me to propose three specific aims: (1) Examine the importance of Scd5 in endocytic dynamics;(2) Determine how Scd5 is recruited to endocytic sites;and (3) Discover other biological processes involving Scd5p. These studies shall provide novel insight into how endocytic sites are established, how phosphorylation regulates this dynamic process, and how the functions of broad specificity phosphatases are controlled within the cell. Defects in endocytic cargo or machinery or regulation of endocytosis contribute to a multitude of human diseases. This includes effects on growth control and cancer, neurological disorders, immune response, developmental defects, diabetes and cardiovascular disease. Thus, knowledge about the basic mechanisms of endocytosis is essential to understanding the underlying basis of such human diseases and will aid in their future diagnosis, prevention, and cure.